Pari-mutuel wagering is a betting system in which all bets of a particular type are placed together in a pool. Payouts for winning wagers are calculated once all wagering has closed, with the pooled wagers for a specific type shared among all winning bettors. The science of determining the outcome of a race is called handicapping. Typically, the house, or bookkeeper, extracts administrative fees and taxes from the pool prior to paying out the winnings. Pari-mutuel betting differs from fixed-odds betting in that the final payout is not determined until the pool is closed—in fixed odds betting, the payout is agreed at the time the bet is sold. The pari-mutuel wagering system is traditionally used for gambling on horse racing and sporting events of relatively short duration in which participants finish in a ranked order. The pari-mutuel gambling system has been applied to other events, such as NASCAR races and golf. However, use of pari-mutuel wagering is still limited to selecting the final positions of the event participants, with bettors generally wagering on properly predicting the winner, second-place, and/or third-place finishers.
Additionally, unlike many forms of casino gambling where bettors place wagers against the house, in pari-mutuel betting the bettor wagers against other bettors and not the house. Pari-mutuel gambling is frequently state-regulated, and offered in many places where gambling is otherwise illegal. Pari-mutuel gambling is often also offered at “off track” facilities, where players may bet on the events without actually being present to observe them in person. It is possible for a skilled player to win money in the long run at this type of gambling, but overcoming the deficit produced by taxes, the facility's take, and the breakage is difficult to accomplish and few people are successful at it. Independent off-track bookmakers have a smaller take and thus offer better payoffs, but they are illegal in some countries. However, the introduction of internet gambling has generated “rebate shops,” typically located outside of the United States. Because these off-shore betting shops operate with minimal overhead, they are able to reduce their take from 15-18% to as little as 1 or 2% by returning some percentage of every bet made to the bettor yet still make a profit. As a result, these rebate shops allow skilled bettors to make a steady income.
Traditional pari-mutuel wagering systems generally encompass wagering which attempts to predict the outcome of an event. For purposes of explanation, examples of such wagers will be discussed in reference to the most common use of pari-mutuel wagering—horseracing. There may be several different types of wagers with each type of wager having its own pool. Straight bets include predicting the order of finish for a single participant: Win—to succeed the bettor must pick the horse that wins the race; Place—the bettor must pick a horse that finishes either first or second; and Show—the bettor must pick a horse that finishes first, second or third.
Beyond the straight bets are more complex bets known generally as “exotic bets.” Examples of exotic bets include: Exacta—the bettor must pick the two horses that finish first and second, in the exact order; Trifecta—the bettor must pick the three horses that finish first, second, and third, in the exact order; and Superfecta—the bettor must pick the four horses that finish first, second, third and fourth, in the exact order. Bettors are also allowed to “box” exotic wagers which allows the bettor to bet all permutations of the numbers in the box. For instance, an exacta box with 2 numbers, commonly called a quinella, is a bet on one of two permutations: A first and B second, or B first and A second. A trifecta box with 3 numbers has 6 possible permutations (of the horses in the ‘box’ 3 can finish first, 2 can finish second, and one can finish third, 3×2×1). As there are more chances to win based upon these permutations, a ‘box’ bet generally costs that specific number of permutation times the betting base amount (i.e. in the box trifecta example, the bet would cost 6 times the base amount). Alternative, a bettor could wager the base amount and have any winnings divided by the number of permutations. Houses typically require a larger wager than the base wager, but not necessarily the entire permutation multiple, in order to place a ‘box’ wager.
Further exotic bets frequently used in horseracing include: Duet—the bettor must pick the 2 horses who will place first, second or third but can finish in any order; Double—the bettor must pick the winners of two successive races with most race tracks taking double wagers on the first two races on the program (the daily double) and on the last two (the late double); Triple—the bettor must pick the winners of three successive races; like doubles, many tracks offer ‘running’ or ‘rolling’ triples; Quadrella—the bettor must pick the winners of four nominated races at the same track; and a Sweep—the bettor must pick the winners of four or more successive races. This is usually referred to as the pick four and pick six, with the latter paying out a consolation return to bettors correctly selecting five winners out of six races, and with “rollover” jackpots accumulating each day until one or more bettors correctly picks all six winners.
Beyond straight bets and exotic bets predicting win, place and show, an additional wager can be made on what is typically called an over-under. In an over-under wager, the sports book or line maker will predict a number for a particular statistic in a given event or a specific action within that event. The bettor will then wager whether the result will be above or below that number. By way of example, over-under wagers are typically made with regard to NFL football games with the statistic being the total number of points scored in the game. Thus, a line maker will establish the number using past performance and expert predictions. The line maker attempts to establish a number wherein half of the bets are on both sides of the over-under. While typically used for total points scored, the over-under wager can be extended to any scenario which will generate wagering action. For instance, with regard to golf an over-under wager could be made on the final positional standings a particular golfer, the number of putts made by a golfer, the number of birdies, bogies or pars made by a particular golfer, the total number of golfers above or below par during the first round, second round, third round or entire tournament. Indeed, over-under wagers can be extended to even non-sports scenarios such as the number of times the President will say “America” during the State of the Union Address.
As can be seen by the above description, pari-mutuel wagering is generally utilized with events that are short in duration with wagers selecting winners or top finishers in the events. Attempts have been made to extend pari-mutuel wagering to events outside of horseracing, such as golf, but these attempts often suffer from bettor indifference as these events, particularly golf, are multi-day events with a winner decided days after a wager is made. Thus, wagering on a winner before the event requires a bettor to wait three or four days before learning whether the wager will pay off or not. These futures bets fail to provide the excitement generated by immediate action, and current systems do not provide for more immediate wagering action, such as daily wagering during a four-day golf tournament or daily wagering on events during an auto racing event, such as qualifying/pole position; “happy hour” racing, as well as the final race event.
As such, there is a need for a system and method that enables and encourages pari-mutuel wagering for events beyond the traditional horseracing. Additionally, there is a need for a system and method that provides for pari-mutuel wagering throughout the course of an event, and not merely wagering on the winner or a specific series of finishers at the conclusion of the event. The present invention addresses these and other needs.